Correlation Between Humana and Tradr 2X

Can any of the company-specific risk be diversified away by investing in both Humana and Tradr 2X at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Humana and Tradr 2X into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Humana Inc and Tradr 2X Long, you can compare the effects of market volatilities on Humana and Tradr 2X and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Humana with a short position of Tradr 2X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humana and Tradr 2X.

Diversification Opportunities for Humana and Tradr 2X

0.24

Correlation Coefficient

Humana  Tradr 2X

Modest diversification

The 3 months correlation between Humana and Tradr is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Humana Inc and Tradr 2X Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradr 2X Long and Humana is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Humana Inc are associated (or correlated) with Tradr 2X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradr 2X Long has no effect on the direction of Humana i.e., Humana and Tradr 2X go up and down completely randomly.

Pair Corralation between Humana and Tradr 2X

Considering the 90-day investment horizon Humana Inc is expected to generate 0.79 times more return on investment than Tradr 2X. However, Humana Inc is 1.27 times less risky than Tradr 2X. It trades about 0.06 of its potential returns per unit of risk. Tradr 2X Long is currently generating about -0.08 per unit of risk. If you would invest  25,338  in Humana Inc on December 28, 2024 and sell it today you would earn a total of  1,700  from holding Humana Inc or generate 6.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Humana Inc  vs.  Tradr 2X Long

Humana Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Humana Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Humana may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tradr 2X Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tradr 2X Long has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with Humana and Tradr 2X

The main advantage of trading using opposite Humana and Tradr 2X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humana position performs unexpectedly, Tradr 2X can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tradr 2X will offset losses from the drop in Tradr 2X's long position.

The idea behind Humana Inc and Tradr 2X Long pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.